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LA Metro wants to hear from companies on its latest idea to fill gaps in transit network

LA Metro hopes to launch an on-demand van service to fill gaps in its transit system. The Helsinki transit agency ran a popular program, pictured here, called Kutsuplus. It was shut down after a pilot phase because it was found to be financially unsustainable.
Helsinki Region Transport Kutsuplus

Los Angeles' transit agency already runs buses and trains throughout the county, but now it's looking into a brand new option for transportation — on-demand van pools.

Dubbed micro-transit, the vehicles could be hailed by riders at street corners who need to get to transit hubs or destinations not served by buses and trains.

"It’s kind of combining the best of the Uber and Lyft model with the best public transit model," said Joshua Schank, chief innovations officer for the Los Angeles County Metropolitan Transportation Authority.

Schank said the on-demand van service would use an algorithm to match several riders along a route – similar to Uber Pool, a car-pooling service of the ride-hailing company.

But like public transit, it would be more accessible. All vehicles would comply with the Americans with Disabilities Act and it would be cheaper, with no surge prices during peak hours. The service would not require a credit card or smartphone.

The cost to ride would likely be more expensive than Metro's base transit fare of $1.75, but significantly cheaper than a ride-hailing service or taxi.

Micro-transit is seen as a way to bridge the gaps in Metro's transit network. The agency also hopes the service would attract more riders at a time when Metro is struggling with declining ridership.

Metro plans to partner with a private company to help run the service. It's been studying places where similar systems have been used like Kansas City and Finland. But both of those services shut down after a pilot phase because they weren’t financially sustainable.

"That is the biggest challenge we’re aware of is how do we make this affordable. That’s why we’ve reached out to the private sector from the very beginning with this project," Schank said.

Companies like Uber are able to keep costs down by paying lower wages for drivers than a public transit agency like Metro, which works with fully-benefited union employees and pays for the upkeep and gas of its vehicles.

In most places, public transit service also relies heavily on subsidies from taxpayers. In L.A., transit fares cover only about a third of the cost of operations.

So the more expensive the service becomes, the more taxpayer subsidies are required if fares are kept low. In the Helsinki program, the cost to taxpayers would have been about 17 euros per ride with a 5 euro fare, an amount officials couldn't stomach.

Schank hopes as more cities try these programs, the approach will be refined and private industry will be incentivized to devise more sustainable business models.

Metro plans to begin accepting proposals for the micro-transit program starting next month.